FEFTA tag doesn39;t affect national security review, official says
Prior notification needed for all foreign buyouts
Companies39; own designations do not need government approval

TOKYO, Sept 3 Reuters Japanese companies cannot use a national security designation as a tool to thwart foreign takeovers, a senior finance ministry official said, pushing back at speculation Tokyo39;s foreign exchange act could be manipulated for protectionism.

The comments follow media reports retail giant Seven i Holdings is seeking to be classified as core to national security under the Foreign Exchange and Foreign Trade Act FEFTA to fend off a buyout bid from Canada39;s Alimentation CoucheTard.

The senior official, who declined to comment on individual deals, told Reuters the issue of core classification doesn39;t change the process of the government39;s security review in cases of foreign bids for companies designated as significant to Japan39;s economy or security.

Seven i, with a market value of 38 billion, is currently categorised in the finance ministry39;s classification list as a company that conducts designated, not core, businesses.

Businesses considered core are those deemed crucial for national security, including nuclear power, space and semiconductors.

Foreign entities face stricter requirements to notify the government in advance when attempting to acquire a stake in a company with a business classified as core than they do when targeting companies in noncore…